Your monthly UK housing market update – including sold and asking prices, RICS surveyor sentiment and predictions for the year ahead.
HM Land Registry – Sold Prices
In the twelve months to September 2023, average UK sold prices fell by -0.1%. This compares with a rise of 0.8% in the year to August.
On a non-seasonally adjusted basis, house prices fell by 0.5% between August and September. Compared with an increase of 0.4% the previous year, it’s a pretty significant drop.
Across the country, the north far outstripped the south in the year to September 2023. While the South West witnessed the largest falls (at -1.6%), the North East exceeded expectations with price growth of 1.6%!
Unsurprisingly, the Bank of England reported that higher mortgage rates hampered buyer demand and market activity. Indeed, property transactions were 17% lower than September 2022 (falling to 85,610) while mortgage approvals dropped to just 43,300 – their lowest level since January 2023.
Rightmove – Asking Prices
Over November, asking prices decreased by -£6,088 to £362,143. While asking prices usually fall this time of year, November’s drop of 1.7% was the largest in five years.
It shows sellers heeding advice on realistic pricing from the outset to “cut through the Christmas noise” and secure quick sales before the new year.
Nonetheless, the year so far has fared better than many predicted. Agreed sales are now only 10% below the same period in 2019, with available properties just 1% behind. While there certainly isn’t a surplus of homes for sale, buyers have greater choice compared with last year.
Overall, smaller properties continue outperforming the rest of the market. Sales of studio, one and two bed homes are just 7% behind 2019. At the top of the ladder, four and five+ bed homes are a hefty 14% behind.
With the Bank of England’s recent decision to pause base rate rises, buyer demand should remain reasonably stable for some time to come.
RICS – Chartered Surveyor Sentiment Survey
In the latest RICS Residential Market Survey, participants describe continued subdued buyer demand in a “tighter lending climate”.
Despite this, most indicators have shifted in the right direction since the previous month. For instance, new buyer enquiries came in at -28% for October. This was up from -37% in September and the least negative reading since May 2023.
Agreed sales likewise went from -35% to -25%, while expectations for the few months ahead rose from -22% to -20%. Twelve month sales predictions remain at zero, suggesting a relatively stable year to come.
While house prices continued falling, the speed of decline slowed. October’s net balance was -65%, slightly up from the previous month’s -67%. Surveyors think these modest price drops are likely to continue, as both three and twelve month price expectations are firmly in negative territory, at -41% and -43% respectively.
Zoopla – Housing Market Outlook
Zoopla predicts that current “repricing” in the housing market is set to remain for 2024.
Despite this, with agreed sales holding steady, Zoopla remains optimistic for the year ahead – taking this as evidence there’s still plenty of determined buyers and sellers out there.
They note mortgage rates must continue falling to tempt more people back into the property market. While prices have fallen and incomes marginally increased, this hasn’t (yet) offset the impact of higher rates.
As a result, Zoopla expects the number of sales to fall before the end of the year, as sellers remove properties from the market with a view to relaunching in 2024. With increased supply, anyone wanting a quick sale in the new year will have to price attractively.
Looking further ahead, many financial experts predict rate cuts from the summer of 2024. If this translates into reduced mortgage rates, sales volumes should improve by the end of the year. Even so, Zoopla expects continued modest price falls over the next twelve months.
Express Index
For a full, comprehensive breakdown of current property market activity. Visit our Express Index here
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